Information Technology Foresight

The latest thinking on creating competitive advantage through information technology.

February 2018

The need for digital know-how starts at the top

As a top executive at your company, you understand the pressing need to prepare for the challenges of the digital age. But is your senior team up to the task?

70% — The proportion of CEOs who say they’re worried about the digital skills of their senior leadership team.

At most companies, efforts at digital transformation are focused primarily on the skills, needs, and culture of mid- and lower-level employees. That is no longer sufficient, says Tom Puthiyamadam, who leads PwC’s Digital Services practice in the U.S. In “The need for digital know-how starts at the top,” this month’s featured article in IT Foresight, he argues that digital transformations are far less likely to succeed if top team members lack a basic understanding of the technical requirements of digitization. “It’s hard to move a ship if the captain and the main crew aren’t steering in the direction they’ve asked everyone else to go,” he writes.

Featured Foresights

Does your senior management team have the skills and expertise to help your company make the transition to the digital future? Judging from the results of our latest CEO study, the answer, by and large, is no. That’s a problem. Not every top leader needs to have deep technical proficiency, but they all should have a clear sense of the digital technologies that are, or soon will be, driving their business. And they must demonstrate, through their own behavior and management style, that they are committed to getting the most business value from these new technologies.

Advances in demand sensing—the use of digital technologies in the analysis of historical data and real-time signals to determine where and when consumers might buy a product, and in what quantity—is transforming industries from retail to consumer goods to auto and aerospace. With it, companies can, for example, speed up delivery of products to consumers, provide better customer service, and reduce product returns. Early adopters stand to benefit considerably, thanks to fewer out-of-stock items and thus higher sales, lower operational costs, and less capital tied up in inventory.

Great business ideas can come from the unlikeliest sources, writes Chris Curran, the Chief Technologist for PwC New Ventures. Some successful products, like hoverboards, robot vacuum cleaners, 3D printers, and videophones all had their origins in science fiction. Others, likes the Pebble smartwatch and the Oculus virtual reality headset, got their early funding through crowdfunding. The point, notes Curran, is that executives looking for the next big thing, whether it be a concept for a new product or a way to boost their companies’ efficiency, need to look far beyond the traditional sources for business inspiration.

A variety of new digital tools has sparked renewed interest in business process automation (BPA). The key to success is to not get hung up on the technology, but to focus on the benefits to be gained, and to manage the transition effectively.